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- EXTRA EDITION
THE SELLThe biggest difference in selling energy solutions versus centralized control solutions (where, for example, a supermarket facilities engineer’s defined need is control from one central location) is the development of a good Return on Invested Capital (ROIC). This is the calculation of the time it will take for refrigeration equipment engineers, for example, to get the money invested in an energy solution back in the form of saved/reduced energy spend/consumption. This completely changes the sales process because we are no longer selling on the feature/benefit of centralization or integration, but, rather, we are arming our engineers with data that he/she can use internally to sell the solution to the CFO or financial buyers.
This means that we (the seller) must be prepared to invest our own labor capital in developing data that supports the sale. For a typical energy-solution sell, the seller will need to commit the time of an expert (energy engineer) to go into the field and audit a customer’s facility (depending on the sale, it could be several facilities) to develop a picture of the client’s energy consumption and related energy spend.
In a single-facility sell - The data is used to determine the current spend, evaluate the areas of potential savings, compare it to internal savings benchmarks (or other similar customers) and come up with a percent of savings available. This percent is then applied to current spend to determine an empirical energy savings per year which is then divided into the cost of the solution to determine the ROIC on the project.
In a multiple-facility sell such as a supermarket chain - The data from a cross-section of their facilities is used to determine the average current spend per square foot (if facilities have differing functions, then you will need to determine an average current spend per function per square foot). This information is then used to determine the highest consuming facilities, which allows us to prioritize available capital to the facilities with the highest savings potential. And, again, for those highest potential buildings, we will calculate the ROIC on the project.
Finally, we will look for and apply utility rebate and incentive monies that fit our solution. This is a service that we provide to our customers that can really reduce the ROIC and allow us to win bigger and more successful projects. The more data that you provide to the utility company during the application process, the more success that you will have in obtaining dollars for your customer’s project. (Obviously, custom rebates require much more data than prescriptive rebates. However, both are data driven).
So, as you can see, data plays a very significant role in selling an energy project. Without the right data that has been collected, collated, and calculated properly, we cannot even effectively sell the solution.
THE DELIVERYNow that the project is sold, our work has just begun. We have made promises to our customer at multiple levels of their organizations (facilities organization, operations organization, and financial organization) which we need to keep.
Prior to installation of any equipment, we need to establish a baseline of the current energy consumption of the facility. This is a critical step that provides data that will be used throughout the energy project’s life. You must define what was consumed (and spent) if you expect to be able to demonstrate the savings derived.
During the delivery phase of an energy project, data is used in some very key ways. All the while the installation process is going on, we are working with the utility company to pull reams of data from the customer’s building that fully justifies the custom rebates that give us the most rebate money.
If we have done a good job in selling the project, then we will have funds in the project that will allow us to break down the customer’s facility into several energy spend categories. We do this by submetering the facility, which allows us to isolate the different energy-consuming areas of the facility.
This is for an energy-reduction project that includes electric and natural gas spend only. If you are doing a sustainability project, then you will have many more categories to deal with such as refrigeration, HVAC, and lighting.
The key outcome to submetering is the ability to tell the customer where the energy is being consumed and where the savings is being derived from. So, again, it is all about data.
So, even though installation is all about physical labor in the customer’s facility, data plays an important role.
THE MEASUREMENT AND VERIFICATIONNow that the project is sold, the baseline is set, and the equipment is installed, we can start to deliver on what the customer is paying us - proof of savings.
If we have done a good job on the sell and the delivery, then the measurement and verification is easier. It is never easy, but it will be easier - if we have done a good job of explaining the following things to our customer:
• How much savings to expect;
• How much they will get in rebates (one-time money);
• Where the savings will come from (from what energy-spend categories); and
• How will they be able to sustain the savings over time (post-project service).
Let’s assume that we have done this well and have been able to install the right equipment to get access to the right data. In this case, then we will have Internet access to all the energy meters in the building (refrigeration system, HVAC, and lighting) and will be able to aggregate this data for our customer. Once collected (ongoing process), then we can normalize the data by negating the influence of weather and other conditions on the consumption. Once the data is fully normalized, we can provide the data back to the customer through our web portal.
If we have done energy projects in all their facilities, then the customer will be able to get an enterprise view of their energy consumption and spend across all their facilities and compare it in many, many ways:
• Consumption and spend per square foot comparison (pre-project to post-project);
• Facility to facility comparison; and
• Region to region comparison.
This information (no longer data as it is normalized and useable for decision-making) is available to them at the facility, at the office, or at home through a customized dashboard. Now, we can work with them to understand the information and show them that the project has been a success based on the goals and expectations set.
The process of sustaining energy savings is a deliberate choice that requires real discipline, so we offer services to our customers that will ensure that the energy saved in the first year of a project will be sustained into the future. The energy project may only last six months, but we prefer to have a 10-year relationship with customers so we can maintain their systems and sustain their savings.
Energy and data must be strongly linked to have a good solution.
Publication date: 07/04/2011